Basic Business Records
The business owner needs to keep financial records for quite a few good reasons.
The main and best reason is to keep track of Profit (or Loss
, which is very important.
It is also critical to know how much you owe and how much you are owed
It is also a legal requirement
keep records, especially for HMRC
Other people who are interested will be anyone who has lent money to the business, especially a bank.
It is possible for a small business to keep good records on a spreadsheet. We have a free spreadsheet
Once a business begins to grow it becomes more difficult for a spreadsheet to cope and we recommend recognized accounting software
We recommend that you record the following as a minimum:
For each transaction (eg. sale or purchase) you should record:
• Amount £ (and other currency)
£ (if you are VAT registered)
• Name of other business or people as appropriate (eg. customer or supplier)
• Date of transaction (eg. invoice date and later payment date)
• Other person's reference if appropriate
• Internal reference
• Other notes
The following are typical transactions which should be recorded:
• Money received from Sales
• Purchases & Expenses
• Payments for Purchases and Expenses
• Capital purchases
• Loans and repayments
• Owner's drawings
Please contact us if you need more help.
• Record keeping (self-employed)